Ownership Of Property Case Study

The transfer of ownership of property occurs when a sale is made and it is imperative to determine when the ownership has passed from seller to buyer. According to section 20 of the sales of goods act; any loss or damage prima facie falls on whoever is the owner at the time. Allgardens Ltd, a wholesale company supplying plants and garden accessories to commercial buyers have entered into three contracts and are unsure as to whether property and risk has passed in each one.

i. In this situation Allgardens Ltd sold 10,000 daffodil bulbs to Paradise Garden Centre for £5,000; however Paradise Garden Centre failed to collect their order on the collection date (5th January). On the 6th January, the warehouse where the daffodil bulbs were set aside caught fire. Section 18, rule 1 states that where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery or both, be postponed. Based on this, it is likely that the courts may conclude a dispute based on the fact that delivery (in this case, collection) was postponed; therefore property was not intended to pass yet. In the case of Ward Ltd v Bignall a car was sold but the seller retained the possession pending payment. The judge said that it is arguable that the buyer and the seller treated the car as if it belonged to the seller until full payment for the car was made or was allowed to take delivery. It is unlikely that the buyer Paradise Garden Centre intended for the property to pass until they collected their order but Allgardens ltd could argue that the contract was completed when Paradise Garden Centre paid...

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...0th of January. Secondly, Allgardens could also argue that Angelic Gardens accepted the passing of property by conduct as they retained the goods beyond the times stipulated by the seller. From the facts of the case, it is apparent that property had passed to the buyer and the risk lied with them.

In conclusion, with regards to scenario 1, the courts would likely rule that property has not yet passed and the risk lied with Allgardens ltd therefore Paradise Garden Centre would not be responsible nor liable for the damaged goods. Secondly, with regards to scenario 2, it is also clear from the facts that property did not pass as the delivery never took place so the risk lies with Allgardens ltd. And lastly, with regards to scenario 3, property did in fact pass and Allgardens have a couple of authorities they can argue as the risk lies with the buyers Angelic Gardens.